Debate Over Modernizing E-Rate Gathers Steam

There is widespread agreement that the federal E-rate program must be overhauled to focus on expanding K-12 access to high-speed broadband connections. But an intense debate is underway about the nuts and bolts of how best to satisfy schools' huge appetite for more bandwidth and the demands for mobile devices for learning—all without leaving poor and rural districts behind.

And still simmering on the back burner, threatening a process that many hope will result in a sweeping technology upgrade for U.S. schools, are the biggest questions: whether to increase the E-rate's current $2.38 billion cap, by how much, and how any such revenue might be raised.

"There's no question that money is going to be the roughest issue to work through on this," said Douglas Levin, the executive director of the State Educational Technology Directors Association, or SETDA, based in Glen Burnie, Md. "But if we are able to structure the program to support a base level of connectivity in all schools, it will really set the stage for the next generation of school reform and improvement."

In June of this year, President Barack Obama unveiled an ambitious plan, dubbed "ConnectEd," aimed at giving 99 percent of the nation's students access to high-speed Internet connections in their schools and libraries.

The central pillar of that plan, the E-rate, established in 1996, provides funds that allow those institutions to buy telecommunications services at discounted prices. The program has been widely praised for helping to ensure that nearly every U.S. school is connected to the Internet. But more recently, it has been criticized for failing to keep up with technological advances as schools seek to upgrade to modern broadband systems.

Sharp Differences

In July, the Federal Communications Commission, which oversees the E-rate, released a "notice of proposed rulemaking," spelling out a long list of options and questions related to a possible overhaul of the program.

In hundreds of public comments filed in response, educators, advocacy groups, industry leaders, and others expressed sharp differences on whether national targets for bandwidth and connectivity should be established; whether E-rate money should be used to support older technologies, such as pagers; how best to shift the program's emphasis to include helping schools upgrade their internal technology infrastructure, rather than just their connections to the outside world; and the extent to which poor, urban, and rural districts should continue to receive preferential access to the program's limited funds.

While most education groups support adding more money for the program, the telecommunications industry appears resistant. That philosophical split is mirrored on the FCC, which has three current members and two nominees awaiting U.S. Senate confirmation.

Commission member Jessica Rosenworcel, a Democrat, has publicly called for the E-rate cap to be raised, but said in an interview that the discussion would be best revisited later in the commission's process.

"In the reform of any government program, our first duty is to assess how we are spending dollars right now," Ms. Rosenworcel said.

On one point, nearly everyone agrees: The E-rate program's onerous application process needs to be streamlined.

"It's stressful, it's cumbersome, and each year you have to start over brand new," said Gary Rawson, the federal-programs coordinator for the Mississippi Department of Information Technology Services and the chairman of the State E-rate Coordinators Alliance, or SECA.

Picking Priorities

Beyond that, however, there is wide divergence. Mr. Rawson and SECA, for example, propose to flip the way E-rate funding requests from schools and libraries are prioritized. Under the current system, "basic connectivity" services for voice communications and Internet access are considered first, leaving requests for essential internal hardware like routers, wireless hotspots, and communications cabling almost entirely unfilled.

"Unless the network equipment inside school and library buildings is sufficient to deliver broadband speeds, the fact that adequate broadband service may be delivered to the doorstep is meaningless," the group wrote in its comments to the FCC.

SECA is also one of many groups to suggest that outdated technologies should be either de-prioritized or made ineligible for E-rate support.

Some, however, argue that telephone and basic Internet connectivity continue to play a central role in poor, rural, and remote schools and should not be written out of the program's guidelines.

"Without federal support, a new digital divide will emerge—a mobile divide," wrote tech giant Qualcomm in its filing with the FCC.

The debate is also philosophical: Many worry that relying too heavily on new federal regulations to spur changes will lead to waste and poor decisionmaking at the local level.

"You can't define for every school in America what this is going to look like," said John Harrington, the ceo of the Edmond, Okla.-based Funds for Learning, a consulting firm that helps schools and libraries prepare applications for E-rate aid.

Double the Money?

Funds for Learning is also among the handful of groups that put a specific price tag—$4.5 billion, roughly double the program's current allotment—on an E-rate overhaul.

"In reality, the true demand [for E-rate funds] is probably north of $8 billion [per year]," Mr. Harrington said in an interview.

In 2012, schools and libraries requested roughly $5 billion in funds, more than twice the amount that was available. But Mr. Harrington and other experts argue that the E-rate's current rules skew districts' requests and create a distorted picture of how much funding schools really need.

One major reason is that requests for so-called basic-connectivity services eat up nearly all the program's available money, leading many districts to no longer bother to request aid for internal infrastructure.

In addition, said Mr. Levin of SETDA, the program seeks to ensure that the neediest schools get served first, and those applications that do get considered generally see their entire requests granted. The result, he said, is that "there's no incentive to make a realistic request."

But changing the current system hinges on the volatile questions of what level of discount and priority access poor, rural, and urban districts should receive.

As a result of all the uncertainty, Mr. Levin said, now is not a good time to discuss raising the E-rate cap.

"I think it's difficult to estimate the need until the building blocks of the program structure are clear," he said.

Major Funding Debate

Even if a consensus ultimately does emerge to expand E-rate funding, there will likely still be a major debate over the source of the money.

The E-rate is one of four federal programs under an umbrella known as the Universal Service Fund, which generates all its revenue through fees charged to telephone companies—which, in turn, pass those fees on to consumers in the form of surcharges on their phone bills.

The E-rate's portion of that revenue could be increased by shifting money from another program under the fund, increasing the existing fees, or expanding the range of telecommunications services subject to the fees.

But many telecommunications companies and industry groups—as well as Ajit Pai, currently the lone Republican member of the FCC—are resistant to the idea of more money for the program.

"The commission should distribute funding more efficiently within the existing E-rate fund," wrote Verizon and Verizon Wireless in their comments filed with the FCC.

A second period for public comment was scheduled to end Oct. 16, but that date was set before the partial shutdown of the federal government.

After that, said Ms. Rosenworcel of the commission, she hopes there can be "a frank conversation about whether the existing cap should be raised," with a final decision on an E-rate overhaul made within the next six months.

Coverage of entrepreneurship and innovation in education and school design is supported in part by a grant from the Carnegie Corporation of New York. Education Week retains sole editorial control over the content of this coverage.

Vol. 33, Issue 06, Page 13

Published in Print: October 2, 2013, as Debate Over Modernizing E-Rate Program Gathers Steam

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